UK Government Grants for Farm Solar Installations 2024

Overview of Available Support

The UK government offers several financial mechanisms to support renewable energy adoption in agriculture. While large-scale Feed-in Tariffs have closed to new applicants, farmers can still access significant support through alternative schemes.

1. Smart Export Guarantee (SEG)

The Smart Export Guarantee replaced the Feed-in Tariff scheme and requires licensed electricity suppliers to pay small-scale generators for excess renewable electricity exported to the grid.

How SEG Works

• Available for solar installations up to 5MW
• Rates vary by supplier (typically 4-15p per kWh exported)
• No limit on number of installations per farm
• Contracts typically 12 months with option to switch suppliers

Eligibility Requirements

• Installation must be MCS certified or equivalent
• Smart export meter required (installed by supplier)
• System capacity must be 5MW or less
• Installation completed after December 31, 2019

2. Enhanced Capital Allowances (ECA)

ECAs allow businesses to claim 100% first-year capital allowances on investments in energy-efficient equipment, including solar panels.

Key Benefits

• Deduct full cost of qualifying equipment from taxable profits in first year
• Significantly improves cash flow in year one
• Available alongside other incentives
• No cap on investment amount

3. Farming Investment Fund

The Farming Investment Fund provides grants to help farmers improve productivity, profitability, and environmental sustainability.

Farming Equipment and Technology Fund (FETF)

• Covers items between £1,000 and £25,000
• Grant rate: typically 50% of costs
• Solar-related equipment may qualify under productivity improvements
• Application windows open several times per year

Farming Transformation Fund (FTF)

• Larger projects (£35,000 to £500,000)
• Grant rates vary by project type
• Focus on robotic equipment, slurry management, and productivity improvements
• Solar may qualify as part of larger efficiency projects

4. Rural Development Programme

Regional rural development programmes across England, Scotland, Wales, and Northern Ireland offer varying levels of support for renewable energy projects.

England: Countryside Productivity Scheme

• Grant support for water resource management and renewable energy
• Funding rates: typically 40% of eligible costs
• Minimum project value: £35,000
• Focus on projects demonstrating environmental benefits

Scotland: Rural Energy Fund

• Support for renewable energy generation and storage
• Funding up to 30% of project costs
• Emphasis on community benefit

Wales: Sustainable Production Grant

• Grants for sustainable farming improvements
• Covers renewable energy installations
• Average grant rate: 40% of eligible costs

Northern Ireland: Farm Business Improvement Scheme

• Support for equipment and technology improvements
• Renewable energy projects eligible
• Grant rates: up to 40%

5. Environmental Land Management Schemes

The Agricultural Transition Plan includes Environmental Land Management (ELM) schemes that may support solar as part of broader environmental improvements.

Sustainable Farming Incentive (SFI)

• Annual payments for environmental actions
• Carbon reduction measures may include renewable energy
• Stacks with other funding schemes

Business Loans and Commercial Financing

Beyond grants, several commercial financing options are available specifically for agricultural renewable energy projects.

Agricultural Mortgage Corporation (AMC)

• Long-term loans for farming infrastructure
• Terms up to 25 years
• Competitive rates for established farms

Power Purchase Agreements (PPAs)

• Third party owns and maintains system
• Farmer purchases electricity at reduced rate
• No upfront capital required
• Typical contract: 20-25 years

Maximizing Your Grant Income

Application Process

Successfully accessing grants requires careful planning and documentation.

1. Research: Identify all applicable schemes for your farm
2. Professional Assessment: Get detailed quotes and system specifications
3. Business Case: Prepare financial projections including grant income
4. Applications: Submit applications well before installation dates
5. Approval: Wait for approval before committing to installation
6. Installation: Use MCS-certified installers for eligibility
7. Claim: Submit claims with required documentation

Common Mistakes to Avoid

• Installing before grant approval secured
• Using non-MCS certified installers
• Missing application deadlines
• Incomplete documentation
• Not comparing SEG rates between suppliers
• Overlooking regional variations in support

2024 Outlook

The government continues to develop support for agricultural renewable energy through the Agricultural Transition Plan. Expected developments for 2024 include:

• Expansion of Sustainable Farming Incentive actions
• Additional funding for productivity improvements
• Enhanced support for carbon reduction measures
• Possible increases to capital allowances rates

Getting Expert Help

Navigating the various grant schemes can be complex. We work with specialist agricultural finance advisors who can:

• Identify all applicable grants and incentives for your farm
• Prepare grant applications and business cases
• Optimize system sizing for maximum grant value
• Ensure compliance with all scheme requirements
• Maximize tax efficiency of your investment